Greg Cassell et al.:
"Agreements are reciprocal understandings of the expectations of two or more people, in any social context.
Reciprocal understandings help people to beneficially coordinate the nature and intensity of mutually influential actions. They help people to build interpersonal trust and reputation by striving to realize and, whenever necessary, to cooperatively adjust our expectations of self and others. Agreements create mutual accountability.
Implicit or informally worded agreements are the basis of most healthy and efficient social processes.
Formal agreements are declarative statements which explicitly document reciprocal understandings of expectations. While it’s possible to create formal agreements through spoken handshake deals, the vast majority of formal agreements are recorded in writing.
Formal agreements may be classified by terms indicating their cultural, economic or political context and perceived intensity. Common terms include: agreements, memorandums of understanding, letters of intent, guidelines, policies, rules, resolutions, commitments, contracts, bylaws, and laws.
The fundamental social value of formal agreements is to prevent or resolve potentially serious, persistent conflicts." ()